On October 4, the famous China expert Professor Zheng Yongnian gave a talk in Singapore. Prof. Zheng gave his predictions on China’s future political development. He also presented concepts on the Xi Jinping era along with his personal views on the anti-corruption campaign, political reform, Xi Jinping’s charisma, and the fourth session of the Party Congress which is about to open. Phoenix University obtained the exclusive rights from the professor to present selected parts of the presentation to our readers.

Introducing the author:

Zheng Yongnian: China expert, currently director of the Asia Institute of Singapore National University, professor, chief editor of “International Journal of Chinese Studies” and “East Asia Policy”, and author of publications such as “Globalization and China’s Transformation”, “China Behaves Like a Federal System”, and “Technological Empowerment: The Internet, State, and Society in China”.

The talk is presented below.

China is now entering the true post-Deng era. Xi Jinping Picks Up the Torch from Mao and Deng, Plans for the Next Thirty Years

Zheng Yongnian: I will only speak for an hour today in order to allow time for questions. You may ask any question you please. I won’t focus on China’s domestic politics because China’s domestic politics are particularly difficult to understand. You can get a fairly good understanding the Hong Kong issue, China-Japan relations and other issues by reading the papers. Where I touch on China’s domestic politics, I will discuss what Xi Jinping’s recent speeches. As our moderator said, China has already changed considerably in the two years since Xi Jinping took office. People outside China are always asking what is Xi Jinping doing? What is he thinking? Actually many Chinese are asking: Where is our country, this ship of state, going? Xi Jinping is the captain, and I want to answer the question what direction is China’s ship of state heading.

Today I will present my personal views. I am not representing my Institute. There are just some personal observations. I think that in order to understand what Xi Jinping is doing, we need first to understand just what is the Chinese Communist Party. In China, the Chinese Communist Party is a tremendously important organization. When it comes to other countries, people will talk such things about the power of civil society and of society. But for China, the Communist Party is still the principal organization. There is no organization in China that can challenge it. There are strong forces in Chinese society but there is no force in Chinese society that can challenge the Chinese Communist Party. The Chinese Communist Party is the chief actor in China’s reforms. I wrote a book about the political parties. I believe that that the Chinese Communist Party is not a political party in the sense that a party is by those who are not Communist Party members. It is not like the Democrats or the Republicans in the United States, not like Japan’s Liberal Democratic Party and not like parties like Singapore’s People’s Action Party (PAP). It is a different kind of organization.

The Chinese Communist Party has been in power for a long time and so it needs to take a long-term perspective. Long range goals are very important. Elsewhere, most other countries have a multiparty system in which parties only think about what may happen during the term in office of a president or a premier. They don’t think beyond their term in office. There are not many political parties that take such a long term view as Singapore’s People’s Action Party. There are fewer and fewer such parties today. Therefore we need to keep in mind that Xi Jinping cannot think only about himself. The Chinese Constitution limits the State Chairman to ten years in office but Xi cannot just think of his two five-year terms in office. Personally, I think what he is thinking about now is about are the three decades that will follow his coming to power. That makes him different from Jiang Zemin and Hu Jintao.

Let me explain this idea. I believe that Chinese history since 1949 can be divided into 30 years of Mao Zedong and thirty years of Deng Xiaoping. It is very important that today Xi Jinping is thinking about the next thirty years. The Communist Party led by Mao Zedong came to power in 1949. What he should have done after coming to power was to build the country and build a system. Unfortunately, Mao was an idealist and so he continued in his revolutionary ways after 1949. The result was many social problems and in particular the Cultural Revolution. Deng Xiaoping learned the lessons of the Mao Zedong era and put China on the path of modernization and national construction for thirty years. Looking at matters this way, we can see that the ten years each of Jiang Zemin and Hu Jintao both belong to the 30 years of Deng Xiaoping. Today we are truly entering the post-Deng era although the Hu Jintao era can be thought of a decade of transition from the Deng Xiaoping era to the post Deng Xiaoping era. Now we have formally entered the post-Deng era. Xi Jinping is thinking about the next 30 years. The basic idea is that Mao Zedong was the first generation, Deng Xiaoping the second generation and Xi Jinping the third generation.

Xi Jinping Strives to Create a Synthesis of the Historical Contradictions Between the Mao and Deng Eras

Xi has a great deal of work to do to create the conditions that will make this possible. From my perspective, Xi has been very successful since he took office.

First, he has striven to make Mao Zedong and Deng Xiaoping less contradictory – that is he is working to create a synthesis. As we all know, in China, there are fierce debates between the left and the right. The left is relatively more inclined towards Mao Zedong and the right relatively inclined towards Deng Xiaoping. Now they have now split into two factions that engage in bloody battles and refuse to speak to each other. What Xi Jinping has done is to create a synthesis of Mao Zedong and Deng Xiaoping. I think he has done the right thing. History cannot be cut into neat periods. If there had been no Mao Zedong, there would have been no Deng Xiaoping. As a scholar, I think Xi has done this well. There are solemn commemorations of the births of both Mao Zedong and Deng Xiaoping. After all, history is history. A recent television movie about Deng Xiaoping was very popular. The film gradually returned to historical consciousness some facts that had been forgotten. Our former Premier Zhao Ziyang also appeared in the film. That is because the fierce struggles of the previous generation are over so later generations need not have the same evaluation of those struggles as the older generation. Xi has done this well. But he still faces big challenges.

The course of reform over the next thirty years is another issue facing Xi. What will reform be accomplished? Many people ask me why Xi set out on such a big anti-corruption campaign. This anti-corruption campaign is unlike previous anti-corruption campaigns. Today I will discuss my understanding of Xi Jinping’s reforms in their political, economic and social dimensions.

Xi Jinping is ending the dispersal of power and moving towards centralization. This is extremely important.

First of all, from a political perspective, the most important thing that Xi Jinping has done is to end the dispersal of power and move China towards the centralization of power. I believe that this is very important. Ever since Deng’s reforms began in China in 1978, every reform has involved decentralization. The 80s were a decade of decentralization. The reforms that followed Deng’s trip to southern China were also decentralizing. During Premier Zhu Rongji’s term, China began to centralize economically but the whole era of Hu Jintao and Wen Jiabao was one of decentralization. The decentralization of those days was not a the center deliberately decentralizing, it was rather the result of the center’s inability to centralize. Why does China today need to centralize? Xi Jinping says that the easy reforms have already been done and the ones that are difficult haven’t been done. The days of eating meat are past: now we have to gnaw on the bones. Gnawing on bones is tough, so we need to centralize. That is the first reason.

The second reason is that special grew very powerful during the 30 years of opening and reform. Special interests became an obstacle to reform. When China’s reforms began, everybody was very poor. Poverty makes it easier for people to change their thinking and so reform was easier to accomplish. Everybody is selfish. If you free up the selfish character of people, then all you have to do is to tell them to go out and make money and they will. However, reform is not just a matter of economics, it is also political and social. If you separate reform into economic reform, social reform and political reform, then economic reform is the easiest to do. Economic reform is encouraging everybody to make money. Social reform is everybody putting aside some money to give to the poor. That is harder. Political reform is even harder since it means taking power away from the people who have it. Therefore the easy reforms have all been done and what is left are the reforms that need to be done but are hard to do. Centralization of power is needed. Today, special interests have grown up that believe that things are just fine as they are. They say no more change. When everybody was hungry, everybody wanted things to change. Today, the people who eat well don’t want things to change. Some have eaten so much that they can barely move. They too don’t want to change. What is to be done? If you want reform, you need centralization of power.

The most important thing is that the centralization of power is ending the dispersal of power that characterized the era of Hu Jintao and Wen Jiabao. When Hu Jintao and Wen Jiabao came to power, they too wanted to get many things done. I remember how after SARS they put forth policy objectives such as the harmonious society and the scientific view of development. They set out a big road map. Why didn’t they succeed? Of course they did have some accomplishments such as social security and guaranteeing a minimum income. But they never made a breakthrough in reform. Why? The fault was in the system. That system was what was called at the time the “collective leadership system”. Then it was the nine members of the Standing Committee of the Politburo. The Standing Committee of the Politburo is China’s highest policy making body. In the Politburo, the rule is essentially one man, one vote. Everyone is equal. One man, one vote is a big problem.

Professor Hu Angang of Qinghua University is an old friend of mine. He says that which China has a collective president system, the United States has a single president system. He says that we have nine presidents and that a collective presidency is better than a one-man presidency. But it doesn’t work really work that way. If you have a collective presidency, at the end you may have no president at all since collective responsibility means in the end that nobody is responsible. Collective leadership in the end means no leadership at all. That won’t do. The most important aspect of any political system is that there is someone who bears ultimate political responsibility. The nine person one man, one vote system of the Chinese Politburo means that everybody counterbalances everybody else. Sometimes I jokingly saw that while the West has the tripartite separation of powers political system, China has a nine-way separation of powers system. Why did someone like Zhou Yongkang appear? The problem is in the design of the top level of the system. The top level design of the system is that the nine standing members of the Politburo split power nine ways – you handle this sector and I’ll handle that sector. This is a system of fiefdoms – a kind of feudalism. The case of Zhou Yongkang clearly demonstrates that that system of dividing up responsibility does not work.

I think the main problem with the top leadership failed was because everyone was vetoing everybody else. Nobody was subordinate to anyone else. In that era, people grumbled that they didn’t know who was in charge. The result of this kind of system was not only that often nothing got done but it created Zhou Yongkang as well. Therefore what we need today is the centralization of power. I believe that Xi Jinping’s judgment is exactly right.

Let’s take an example. Vietnam’s reforms used to follow China’s closely step-by-step. If China made a certain reform then Vietnam would make the same reform. But now things are working out for Vietnam. Why? Just because Vietnam’s leaders decided to go in the opposite direction from China. While China is moving towards increasing centralization of power, power in Vietnam is very divided. Now Vietnam is like an oxcart with four drivers. There is the General Secretary of the Vietnamese Communist Party, then there is the Premiers, the National Assembly and the President. They are four different people. The groups that they are leading are very divided. Analysts say that Vietnam is in a dangerous situation. The recent riots in Vietnam were very dangerous. You shouldn’t be surprised if one day there is a “color revolution” in Vietnam because the necessary conditions for that already exist.

Xi Jinping established centralized leadership by small working groups. These small working groups are open and can be institutionalized.

Everyone is a bit worried about the centralization of power going on today. People are asking the question, ‘Is this centralization being done just to strengthen the personal power of the leader?’ Naturally to answer that question, we’ll have to keep watching. But from what I have seen to date, I think Xi Jinping is doing well. The centralization of power underway is manifested in the founding of four new organizations. The first is the Leading Group for Deepening of Reform, the second is the Leading Group for Informatization and the Internet, the third is the National Security Council, and the fourth is the Leading Group for Military Reform. In addition to the Leading Group on Military Reform, which Xi Jinping as Chairman of the Central Military Commission, naturally leads, he leads the the other three leading groups as well. Premier Li Keqiang is the vice chair of all the leading groups. Formerly there were nine Politburo members. Now there are seven. In the previous system, each of the Politburo members led his own slice of the pie. Now it is different. Xi is in charge of everything. The other members of the Politburo are distributed among the various leading groups. I think this is a better system and one that is easier to coordinate.

There is another issue that has been ignored. There was some debate about Xi Jinping also leading the Central Leading Group on Finance. Some thought that Premier Li Keqiang should head that leading group. But they are wrong. The Central Leading Group on Finance should also be led by the General Secretary. In the Jiang era, Party General Secretary Jiang Zemin led it. What is more important is that formerly the central leading groups had an ‘underground’ character. Who chaired them, who was the vice chair, who the members were not disclosed to the public. Xi Jinping opened up the four leading groups so that they are formal organizations. Formalized organization are more open and transparent. When they meet, when they don’t meet, what they discussed is public information. Formal organizations can be institutionalized and can develop further.

Xi Jinping has been strongly influenced by people like Lee Kuan Yew. I don’t believe that he will follow Mao Zedong. He wants to inherit some different from Mao Zedong and Deng Xiaoping. He wants to stress the continuity of Chinese history. He wants to follow the example of powerful Asia figures such as Lee Kuan Yew and Jiang Jingguo who were successful institution builders. At the fourth session of the Party Congress that will meet this month he will certainly have much to say about institution building. So don’t underestimate Xi Jinping. This kind of progress is extremely important.

Concentrating power also has negative effects. The fourth session of the 18th Party Congress will still be working at dividing powers.

There are negative consequences to the concentration of power. Some people will say, ‘Boss, the power is in your hands. You want to do something, go ahead. Other people will just watch.’ This is a problem. I believe that the concentration of power in itself is not the objective. Both Xi Jinping and Li Keqiang stress that the center will devolve the authority of oversight over administrative examination of applications for permission and their approval. [transl. Note – ref August 2012 and February 2014 State Council http://baike.baidu.com/view/ 1200633.htm ]

Fighting Corruption Means Fighting Special Interest Groups, Fighting Monopolists and Fighting Oligarchs

The second point is that concentrating power is linked to the fight against corruption. Fighting corruption means fighting special interest groups. As a scholar, I just can’t understand the kind of corruption that we have seen in China in recent years. If you are corrupt and steal hundreds of thousands or millions of renminbi, I can understand. You can use that money to live a better life. But stealing billions, tens of billions or even hundreds of billions – that I can’t understand. You won’t be able to spend all that money in a lifetime. Therefore to fight corruption, we need to concentrate power. If we don’t have power, how can we fight corruption? Ever since the 1980s when Deng Xiaoping started anti-corruption campaigns, every group of top leaders has had to carry out anti-corruption campaigns. They have kept doing it down to this day. Given that, how can corruption still be as bad as it is today?

Today’s anti-corruption campaign differs from its predecessors. This anti-corruption campaign’s main target is the oligarchs. In the post-Soviet era, in Russia, Eastern Europe, and Ukraine there appeared oligarchs. During the preceding planned economy era, the economy was divided up into sectors such as industrial sector, steel, telecommunications and there was only one department controlling the entire field. Therefore during the transformation from the planned economy to the market economy, oligarchs emerged. However, once an economic oligarch has money, he wants to be a player in politics. Economic oligarchs became economic oligarchs. This is the biggest problem for post-Communist countries.

The era of Yeltsin in Russia was the era of the oligarchs. Only after Putin came to power was the power of the oligarchs brought under control. The problems of Ukraine today are the problems brought by political oligarchy. All their economic oligarchs changed into political oligarchs. One political party for each oligarch. Each oligarch would gather together their own people and then start fighting one another. Once the economic oligarchs had changed into political oligarchs, so-called democracy became merely a struggle between oligarchs. Once political oligarchs are created through the democratic process, that country is finished. I think there is no hope for Ukraine. Behind every Ukrainian leader is an oligarch. Some of them obey Russia, others America. Once a multiparty system appears, the country will be on the path to dissolution.

China’s situation is just like this. Before the Eighteenth Party Congress convened, some economic oligarchs had changed into political oligarchs and those political oligarchs were interfering in politics. Zhou Yongkang himself was a big oligarch who started meddling in politics. Today, the anti-corruption efforts of the top leadership focus on eliminating the pathway that enables an economic oligarch to change into a political oligarch. This is important. Once that is accomplished, the big and small tigers down below aren’t very important. Everyone can this in the current anti-corruption campaign. Why was it that most of the people who were caught had ties to Zhou Yongkang? This was true for people in many sectors from the Central Television Station to local political leaders, and even industrialists like Liu Han. Everybody saw this at the big dinner to celebrate the 65th anniversary of the founding of the PRC. Both Hu Jintao and Jiang Zemin appeared at the dinner. I believe that Xi Jinping is wise. He doesn’t aim at particular individuals but at the groups. I believe that this is very important.

Fighting corruption takes political wisdom. Look, behind every anti-corruption case is a group of wealthy businesspeople. I believe however that the Communist Party’s Central Disciplinary Commission is taking a measured approach. If the businesspeople can be left along, they are left alone and left off the hook. Therefore there are only a very few cases like those of Liu Han. In fact, if they wanted to put them away, many businesspeople could be arrested. There was a great deal of corruption among Chinese businesspeople because of China’s previous policies and because of the gaps in the legal system during the period of transformation from a planned economy to a market economy. That is the nature of Chinese society. You can’t say it but you just do it. If you were to say what you are doing then people would be unhappy with you. I believe that Xi Jinping is doing very well.

Local officials must not do nothing for fear of getting caught. Doing nothing is the worst kind of corruption.

There are also, however, contradictions between fighting corruption and reform. Recently, I took a trip all around China. What I noticed is that all the officials at the office director and above spent their entire day worrying whether they would be detained the next day. Thinking about cases like the Guangzhou Municipality Party Secretary who was suddenly detained just as he was walking into a meeting, everyone is very worried. If you want to reform, you have to do something. But if you do something, you will be hurting someone’s interests. If you do that, people will be collecting materials to make you look bad. They might be together a file on what you have done and put it on the Internet. That would be a big problem for you. So everybody is just not doing anything.

Some local leaders are just plain dumb. Shanxi Province because they wanted to “cage up power in a box” made a negative list about what the Communist Party Provincial Committee leadership including the Provincial Party Secretary, the Governor, and the members of the Provincial Communist Party Standing Committee may not do. Many local leaders don’t put much of an effort into doing anything, not even into fighting corruption. That is very strange. It is as if even though they are the Provincial Party Secretary and the Governor, they lack political resources. That they occupy that position but for the sake of being a clean official just don’t do anything at all. That is also a kind of corruption. I believe that if you in order to stay clean don’t do anything, that is also a kind of corruption, and perhaps a more serious kind of corruption. There will certainly be problems in places like that. Today, most of the top officials in Shanxi Province have lost their positions. It is only to be expected that when you do business that you are honest. Doing nothing for the sake of staying clean is certainly a problem.

Some people whose interests are threatened keep on saying that this anti-corruption campaign will affect the Chinese economy. I said that is not a problem because you certainly don’t want China’s sustainable economic development to be built on a foundation of corruption. I believe that the anti-corruption campaign may hurt the economy in the short term but it will have a positive effect over the long term. For example, if the price of maotai falls, more ordinary people will be able to enjoy it. If the price doesn’t go down, then only the general managers of state enterprises will be able to afford to drink it. The anti-corruption campaign will certainly be very beneficial to China’s sustainable economic development over the long term.

There are few systems to stop corruption. The key question is who is responsible for these systems. If corrupt officials are responsible for them, then they will just be as corrupt as usual.

Is the anti-corruption campaign really a mass campaign? What everybody worries about is that Xi Jinping is imitating Mao Zedong-style mass campaigns against corruption. I think differently on this question. I strongly agree with Wang Qishan’s view that the problem is created by the people. He says that there are just so many corrupt officials who manipulate the system that even the best possible system would just create the same old kind of corruption. Therefore something different is needed. A system set up by honest people is a good system. A system set up by corrupt people is a corrupt system.

China has more anti-corruption systems than any country in the world. Singapore has only one Corrupt Practices Investigation Bureau. Hong Kong has only one Independent Commission Against Corruption. Why are those two societies so honest? How many anti-corruption systems does China have? There is the Disciplinary and Inspection Commission

of the Chinese Communist Party, there is the government’s Corruption Prevention Bureau and the Anti-corruption Bureau, there are anti-corruption systems in the National People’s Congress and the Chinese People’s Consultative Congress. Every university has one. But what we often see is that there people fighting corruption are actually themselves very corrupt. I think about former Beijing Municipality Vice Mayor Wang Baosen. He was the head of the Beijing Municipality Anti Corruption Bureau but he was himself very corrupt. How can this situation be tolerated? Wang Qishan made a proposal that I strongly agree with. First cure the symptoms and then cure the disease.

Anti-corruption systems themselves are not the answer. China already has many systems. The key question is the kind of system we have. Chinese intellectuals say that China is corrupt because of its one-party system because it concentrates power too much. I disagree. Power within China is too divided. China has so many directors and vice directors and it has so many anti-corruption organizations. But nobody assumes responsibility. Even worse, they give corrupt people many opportunities. In the end, who will take responsibility? In Singapore it is simple. If corruption occurs, it is the responsibility of the Corrupt Practices Investigation Bureau. It cannot evade its responsibility by placing the blame elsewhere. Hong Kong is the same way.

The Central Disciplinary Commission is concentrating power to fight corruption. Wang Qishan is doing well.

China has very many agencies but just who is responsible? China needs to centralize power in order to fight corruption. Wang Qishan is doing well. Anti-corruption work being led by the Central Disciplinary Commission is going well. There are several aspects of their anti-corruption work that I think are being done very well. The first is further centralizing power. What does that mean? The various commissions of the Central Committee are not relying on their own devices to fight corruption. The people doing anti-corruption work for them are people sent down from the Central Disciplinary Commission. If there were corruption in the Ministry of Information Industry, then the Central Disciplinary Commission would send some people over. These anti-corruption officials are independent and have no ties to the information industry.

As for the relationship between the center and the localities, the Central Disciplinary Commission takes charge of fighting corruption at the first level down from the Center. China has always had the problem of “the boss is corrupt”. On Communist Party provincial committees, the secretary of the provincial disciplinary commission is subordinate to the secretary of the Communist Party committee. How can you expect then that the secretary of the provincial disciplinary commission do anti-corruption work against a corrupt provincial party secretary? Of course he can’t do it. Most anti-corruption work is just the right hand fighting the left hand. Now things are being handled better. Now the next level down is managed by the next higher level. This means that the Central Disciplinary Commission will be in charge of fighting corruption in the members of provincial committees. No longer will be the provincial committee be in charge of fighting its own corruption.

One more point. Anti-corruption work used to rely on ordinary citizens making reports. Now it is different. The last time that I visited the Party Central Disciplinary Commission, the person showing me around said that Wang Qishan said that we too need to reform ourselves. He set up a website for the Central Disciplinary Commission of the Communist Party. Why? You can still make a report, anyone can make a report on the website of the Central Disciplinary Commission. Now it is centralized. You don’t need to go to Hong Kong anymore to make a report. This is very effective. Now the Central Disciplinary Commission receives many reports. They are sorted into categories. Some are handled directly by the center while others are the business of the provincial party committee and so are sent to the top level of the provincial committee for handling.

Xi Jinping has is very bold man. I am confident about China’s political and economic development.

Naturally, the most important issue is what kind of system shall we build? What will the Fourth Session of the Eighteenth Congress of the Chinese Communist Party do? I believe that there will be many reform proposals. Many people do not understand what Xi Jinping is doing. For example reforming how official vehicles may be used. Former Premier Zhu Rongji wanted this reform, but when the reform plan came out, many people opposed it and so it was abandoned. But now Xi Jinping wants to carry out this reform. I believe Xi Jinping has the boldness of a leader. Xi Jinping is able to look beyond his own personal interest. He is a leader who sees the big picture. I think that any national leader, and any leader of a party organization, if they can’t see the big picture, they will end up merely serving their own private interest. That is the “virtue” which thousands of years of Chinese tradition speaks about. You need virtue. If you don’t have virtue, then how could you manage a country like China.

I have confidence in Chinese politics. As far as the economy goes, people worry that the economy is under too much pressure and so wonder that there will be so big shakeup. Growth last year was 7.5%, we don’t know what the figure will be this year. I personally don’t think there is a serious problem. There is no way that the Chinese economy will be able to grow at a pace of 8% or greater indefinitely. All economies are alike this way. The Four Dragons of East Asia are that way too. Their era of rapid growth has ended. China has already entered a phase of moderate growth at the 6 – 7% level. That is enough. Why did people say in the time of Premier Wen Jiabao that China had to maintain an 8% growth rate. The main reason was to keep the unemployment rate low as millions of new workers joined the Chinese work force. In recent years the economy has been slowing down but employment is rising. This means that the Chinese economy is undergoing structural changes with the growth of the service sector and rise in domestic consumption. I believe that over the next ten to fifteen years including Xi Jinping’s time in office China should be able to maintain 7% growth.

Today Chinese per capita income is about USD 7000. China has already built its large scale infrastructure and has completed its period of massive industrialization. Unlike India. India will have great difficulty setting onto the path of rapid growth. Several years ago I had dinner with the former Singapore PresidentSellapan Rama Nathan. I learned a lot from him. He said that the difference between China and India is that China has had a revolution and India has not. I think what he said makes a lot of sense. It was Mao Zedong who laid the foundation for the capitalistic rise of China today. If it were not for Mao Zedong, China would not have had the rapid development of capitalism that we see today. India capitalist economy is only in the formal sector or about 30% of the economy. Sixty to seventy percent of the Indian economy remains traditional. Land in China belongs to the state. If the state wants to take it, it takes it not matter how much the Chinese people complain. This would be very hard to do in India. Therefore it is China and not India that is capitalism’s final frontier. It will be interesting to look back in ten years and see if I will have been right about this.

Today, many Westerners are asking whether a financial crisis like the one on Wall Street could have happened in China. I believe that would be impossible. Local governments have much property, so if there were not enough money, they could just sell some. Increasing privatization somewhat would solve the problem. Today, the problem of local government debt has been brought under control. The expansion of the state-owned enterprises has also been brought under control. Those are two positive trends.

China’s problem today is the unequal distribution of housing. There are many empty houses yet there are also many people who can’t afford to buy a house. This is abnormal. If the ruling class can solve the real estate problem, maintaining political stability over the next thirty years won’t be difficult. Solving the real estate problem will test the resolve of the ruling class. According to the decisions taken at the third session of the 18th Party Congress, about 300 new reforms will be put in place. I believe that pushing ahead will all 300 at once would be impossible. A breakthrough reform will need to be found among the 300 reforms planned. Real estate could can at least become the breakthrough point for social reform. Today, we will have to wait to see what methods that the fourth session will propose. This is the end of the talk, now we’ll open it up to discussion. Thank you!


China’s Three Step Procedure: First economic reform, then social reform, then political reform. During the time of Xi Jinping, China will accomplish its rejuvenation.

Xu Guanlin, honorary president of Singapore’s Nanyang Technological University: I personally strongly agree with Prof. Zheng Yongnian’s views. Xi Jinping is moving ahead very systematically. First he is consolidating power and fighting corruption, and then moving on to institution-building. From the perspective of Chinese history, the time of the third generation leader was a time of strong development and prosperity, for example the time of prosperity during the time of the Qianlong Emperor of the Qing Dynasty. I want to ask Professor Zheng if this is historical perspective is correct?

Zheng Yongnian: China previously was ruled by dynastic houses, today it is governed by the Communist Party. This is somewhat different. A dynasty is a family affair. A party is different. The Communist Party has over 80 million members – more than the population of many countries. A dynastic house by its very nature cannot democratize – that is to say the emperor decides whom his successor will be and that settles it. The Communist Party can be democratized. That will take opening up, competition and participation. The Communist Party needs to open up. If it doesn’t open up, it will the party of a small group of special interests.

The West often talks about multi-party systems, but I believe that the USA and Europe have have systems based on the power of families. The Communist Party stresses that interests within the Party must be harmonized. Democracy within the Party can accomplish that. I believe that Xi Jinping will be able to see the objective situation and apply his personal wisdom to it. I believe that China can be reborn. At the least, the Xi Jinping era will bring China from a middle-income society to a developed society.

A member of the audience told me that he had just purchased a copy of my book “China’s Three Steps Plan for Reforms”. In that book, I summarize China’s three-step plan for reform: first economic reform, then social reform, and finally political reform. First production, then redistribution and then democracy. That sequence works better.

Japan and the Four Dragons of East Asia developed that way. In their economic development, the “Four Dragons” of Asia did better than the Europeans. Why did socialist movements and working class movements appear in Europe about the time of the first and second world wars? Marx said that primitive capitalism would not protect society. Therefore workers movements appeared and then a social welfare system began in European societies. Reforms were made with each trying to outdo the other. Asia was different. Japan the Four Dragons of Asia (including Singapore) , the government took the initiative to protect society during economic development. Society construction also moved along and so there was very peaceful. One example, which I personally strongly approve, is the openness of Singapore politics today. Singapore’s people all have a middle class or better income and so everyone is peaceful and rational. The Communist Party does not need to be giving out directives, what it needs to do is get China to the level at which it is 70 – 80% middle class. Once China becomes a middle class country, adopting democracy or some other system becomes possible. If the middle class is not large, than you won’t be able to do anything well.

A question from the audience: The gap between the rich and the poor is large. Among ethnic Chinese people there have arise left-wing liberalism. They stress equality and oppose giving priority to market solutions. What do you think about this?
Zheng Yongnian: My own view is that the first contradiction between democracy and the economy is as I just said before the rise of the welfare society – a contradiction between the working class and capital. Now the contradiction is between the middle class and capital. Today when people protest, they want to protest against the government. But capital is not under the control of government. Once government could control capital but today if a government puts pressure on capital, then capital flees. Therefore today governance is getting more and more difficult. I very must sympathize with these political leaders. Actually this is a world-wide problem. When our think tanks have exchanges with European think tanks or political leaders, the know what the problem is and how to solve it. However, they are unable to form an effective government. So the problem of capital flight is a world-wide problem. This is nothing new. It is normal in any era to see some alternation between the left and the right.

(Phoenix web copyright manuscript, when reproducing please note the source: Phoenix Internet University, Editor-in-charge Wang Demin, Singapore correspondent Jin Luying)